Matthew Watson, Professor of Political Economy, discusses David Ricardo's revolutionary theories on free trade and comparative advantage. Helen Paul provides insights into Ricardo’s tumultuous early life and financial savvy, shaped by historical events like the Battle of Waterloo. Richard Whatmore examines how Ricardo’s critiques of landlords intersected with societal class tensions. Together, they explore the lasting impact of Ricardo's ideas, including the intricate relationships between trade, war, and economic policy that continue to influence thinkers today.
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Waterloo Fortune
Ricardo became rich after the Battle of Waterloo.
He exploited market uncertainty about the battle's outcome to buy cheap government bonds.
insights INSIGHT
Critique of Smith
Ricardo and Malthus challenged Adam Smith's optimism about commercial society.
They highlighted potential limits to production due to population growth.
insights INSIGHT
Malthus and Population
Malthus believed overpopulation led to poverty, which he saw as promoting virtue.
He advocated for preventive checks like delaying marriage, while Ricardo favored birth control.
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On the Principles of Political Economy and Taxation
David Ricardo
Published in 1817, 'On the Principles of Political Economy and Taxation' is David Ricardo's most well-known work. It outlines his labor theory of value, which posits that the value of a good is determined by the labor required to produce it. The book also introduces the concept of comparative advantage, arguing that countries benefit from international trade by focusing on goods that require fewer resources to produce. Ricardo critiques earlier economists like Adam Smith and discusses the impact of taxation, machinery, and other economic factors on different classes of society. His work has had a lasting influence on economic theory and policy, particularly in the areas of free trade and the distribution of wealth among landlords, capitalists, and workers.
An Essay on the Principle of Population
Or a View of Its Past and Present Effects on Human Happiness
Thomas Robert Malthus
In this seminal work, Malthus explores the dynamics between population growth and subsistence. He posits that population increases at a geometric rate, while food production can only increase arithmetically, leading to natural checks such as famine, disease, and vice. The essay discusses the implications of these ideas on societal improvement and human existence, emphasizing the necessity of understanding population dynamics for meaningful discourse on societal advancement. Malthus also details preventive and positive checks on population, such as birth control and higher mortality rates, and their effects on economic stability and human well-being.
The Wealth of Nations
Adam Smith
Published in 1776, 'The Wealth of Nations' is Adam Smith's magnum opus that laid the groundwork for modern economics. The book critiques mercantilist economic theories and introduces the concept of the 'invisible hand,' which describes how individual self-interest leads to societal benefit. It emphasizes the division of labor, the accumulation of capital, and the importance of free markets. Smith argues that a nation's wealth is not measured by its gold and silver reserves but by the stream of goods and services it produces. The book also outlines the core functions of government, such as maintaining defense, enforcing civil law, and promoting education, while advocating for limited government intervention in market activities.
Melvyn Bragg and guests discuss one of the most influential economists from the age of Adam Smith and Thomas Malthus. Ricardo (1772 -1823) reputedly made his fortune at the Battle of Waterloo, and he made his lasting impact with his ideas on free trade. At a time when nations preferred to be self-sufficient, to produce all their own food and manufacture their own goods, and to find markets for export rather than import, Ricardo argued for free trade even with rivals for the benefit of all. He contended that existing economic policy unduly favoured landlords above all others and needed to change, and that nations would be less likely to go to war with their trading partners if they were more reliant on each other. For the last two hundred years, Ricardo’s Theory of Comparative Advantage in support of free trade has been developed and reinterpreted by generations of economists across the political spectrum.
With
Matthew Watson
Professor of Political Economy at the University of Warwick
Helen Paul
Lecturer in Economics and Economic History at the University of Southampton
And
Richard Whatmore
Professor of Modern History at the University of St Andrews and Co-Director of the St Andrews Institute of Intellectual History
In Our Time 
